Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose WAC for the underlying mortgage for a pass-through is 9%. The pass-through rate is 8% with a WAM of 360 months initially. The total

image text in transcribed

Suppose WAC for the underlying mortgage for a pass-through is 9%. The pass-through rate is 8% with a WAM of 360 months initially. The total par of the mortgage is $500 million. Assume that in month 30 the beginning balance of the underlying mortgage is 337,568,221 and the total principal payment in month 30 is $2,793,137. The conditional prepayment rate in month 31 is 9.9%. Answer the following questions: 1. Compute the single-month mortality rate in month 31. 2. Calculate mortgage payment for month 31. 3. Calculate i) scheduled principal payment in month 31, ii) prepayment in month 31, and iii) beginning balance in month 32. Suppose WAC for the underlying mortgage for a pass-through is 9%. The pass-through rate is 8% with a WAM of 360 months initially. The total par of the mortgage is $500 million. Assume that in month 30 the beginning balance of the underlying mortgage is 337,568,221 and the total principal payment in month 30 is $2,793,137. The conditional prepayment rate in month 31 is 9.9%. Answer the following questions: 1. Compute the single-month mortality rate in month 31. 2. Calculate mortgage payment for month 31. 3. Calculate i) scheduled principal payment in month 31, ii) prepayment in month 31, and iii) beginning balance in month 32

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Numerical Methods In Finance

Authors: René Carmona, Pierre Del Moral, Peng Hu, Nadia Oudjane

2012th Edition

3642257453, 978-3642257452

More Books

Students also viewed these Finance questions

Question

Describe the five elements of the listening process.

Answered: 1 week ago